Leasys, a joint venture between Stellantis and Crédit Agricole Consumer Finance, has decided to further strengthen its financial profile with the issuance of a new bond amounting to euro 500 million. As Stellantis announced on Oct. 23, the transaction was completed last Oct. 18, 2024. The event also set a record in terms of investor attendance, which testifies to the great confidence they have in the group’s business model and future prospects. The great success of this fifth issue for the EMTN Program has further consolidated Leasys’ position in the capital market.
Investor confidence in Leasys
As anticipated, Leasys SpA has priced on October 18, 2024 a €500 million – like more than $538 million – senior unsecured debt issue maturing in January 2029 with a fixed-rate coupon of 3.375 percent. This transaction represents the fifth public issuance under the Consolidated EMTN Program by Leasys and has raised a very high quality order book of €2.5 billion from more than 170 investors. This issue, the third in 2024, further strengthens the group’s funding position, confirming investors’ confidence in Leasys.
For those who are not aware, ‘EMTN’ stands for Euro Medium-Term Note. It is a program that gives companies the opportunity to be able to continuously issue debt securities (bonds) in different types of currencies and also with varying maturities. All this, without ever having to seek permission from the relevant authorities, therefore a great advantage in terms of timing. To make it more understandable, we can say that this system can be seen as a kind of ATM to be used to raise funds in the capital market.
The reasons for the establishment of the program and its importance
Leasys, as we know, is one of the leading long-term rental companies in Europe, and it established the program we are talking about for several reasons. The first is to finance growth, meaning that funds are raised through the issuance of bonds, which are used to finance the expansion of Leasys’ business. For example, buying new cars, or developing new services and making new acquisitions. It also serves to diversify the sources of financing. In this case, instead of relying only on credit from banks, Leasys has access to a much wider range of investors, which makes its financial structure much more solid. Finally, the Program also serves to manage debt efficiently, as Leasys has the ability to optimize its debt management. This, it is able to do by tailoring the characteristics of the issues to its needs and various market conditions.
But why is this program important? For Leasys it means having greater autonomy in financial terms and a much more flexible debt structure. It also has the ability to access much more competitive financing terms. For the market, on the other hand, it helps reinforce the role of capital markets as a source of financing for the country. Finally, for investors, as it becomes possible for them to invest in a decidedly solid and ever-growing company with an important potential return.